31.205-44
Training and education costs
Only training and education costs directly related to an employee’s work are allowable, with strict exclusions for overtime, unrelated education, and contributions to educational institutions.
Overview
FAR 31.205-44 outlines the allowability of training and education costs for government contractors. It specifies which costs related to employee training and education are allowable and details several exceptions where such costs are unallowable. The regulation aims to ensure that only reasonable and necessary training expenses directly related to the employee's current or anticipated job are charged to government contracts, while preventing the inclusion of personal, excessive, or unrelated educational expenses.
Key Rules
- Allowable Training and Education Costs
- Costs must be related to the employee’s current or reasonably expected field of work.
- Unallowable Overtime Compensation
- Overtime pay for training and education is not allowable.
- Unallowable Salaries for Certain Classes
- Salaries for attending undergraduate or part-time graduate classes during working hours are unallowable, unless unusual circumstances prevent attendance outside regular hours.
- Limits on Full-Time Graduate Education
- Costs for full-time graduate education are unallowable beyond two years or the degree program’s length, whichever is less.
- Unallowable Grants and Contributions
- Grants, donations, scholarships, and fellowships to educational institutions are unallowable.
- Restrictions on Non-Employee Training Costs
- Training costs for non-employees are unallowable, except for employee dependents’ primary/secondary education overseas where public education is unavailable.
- Unallowable College Savings Contributions
- Contractor contributions to college savings plans for employee dependents are unallowable.
Responsibilities
- Contracting Officers: Must review and determine the allowability of claimed training and education costs.
- Contractors: Must ensure only allowable training and education costs are charged to government contracts and maintain documentation for compliance.
- Agencies: Oversee contractor compliance and audit cost submissions as necessary.
Practical Implications
- This section prevents contractors from charging the government for excessive or personal education expenses.
- Contractors must carefully document and justify training costs, ensuring they are directly related to the employee’s work.
- Common pitfalls include charging for overtime training, unrelated education, or contributions to educational institutions, all of which are unallowable.